Newt Gingrich Is Why America Can’t Have Nice Things

Huffington Post, By Zach Carter

That mess creates a lot of legal uncertainty. Private-sector investors don’t want to get tied up with mortgage risk, because they simply don’t trust the banks. And young people who used to buy houses can’t afford to invest thanks to elevated unemployment and weak wages created by the financial crisis.

But you wouldn’t know any of this from the Bipartisan Policy Center’s two-day housing conference. Four panels and speeches were explicitly devoted to the future of housing finance reform — insider code for “how to privatize Fannie Mae and Freddie Mac.”

The only real trouble is a 2012 Treasury Department decision that almost all profits from Fannie and Freddie have to be swept into the general fund of the U.S. government. That prevents the firms from building up a capital base that could allow some leniency on mortgage standards to let more people into the market — if that is, in fact, needed. Elevated joblessness, stagnant wages and increasing economic inequality may well be the ultimate culprits, rather than loan approval standards.

Read full article here: Newt Gingrich Is Why America Can’t Have Nice Things